The Enabling Environment

Computerised machines at the Alltex Industries factory in Kenya create garments for export to North America and Europe. A project company of the Aga Khan Fund for Economic Development's (AKFED) Industrial Promotion Services, the factory employs 2,000 people, 80 percent of whom are women. As part of AKFED’s mandate to integrate innovative social development initiatives, the plant provides a variety of services to its employees, including a crèche for workers’ children, healthcare and educational opportunities.
Photo: AKFED/Gary OtteIn every country in which it works, the AKDN seeks to promote an enabling environment – the adoption of laws and policies that allow, favour and mainstream the creation of civil society institutions, promote good governance and foster a socially responsible private sector.

“Both the development of the economy and the success of social institutions depend on the creation of the right environment for progress, an environment which enables both businesses and people to realise their full potential… The creation and extension to all areas of the nation's life of this enabling environment is… as critical to national growth as sunlight is to the growth of plants.”
His Highness the Aga Khan, speaking at a dinner hosted in honour of the President of the Republic of Kenya, Nairobi7 October 1982In AKDN’s experience, “enabling environments” are especially effective in alleviating poverty when the private sector plays a vital role.

The private sector can be especially effective when it cooperates with governments that foster legislative, regulatory and fiscal structures that promote development rather than impede it. Public-private partnerships have been shown to provide solutions to both chronic and emerging development challenges.

The enabling environment, when it is instituted, has knock-on effects that first affect perception – both external and internal – and then lead to tangible benefits. Appropriate laws and regulations encourage enterprise and initiative. The existence of democratic governance – including an independent media and the protection of the rights of citizens – persuades good managers, doctors, nurses and teachers to stay and serve their country, rather than emigrate as soon as they are skilled. Such an environment also draws inward investment which can have rapid and dramatic effects on employment, human resource development and the overall economy.

Aga Khan Agency for Microfinance

Microfinance for Women in Northern Pakistan

Since its establishment in 2005, the Aga Khan Agency for Microfinance (AKAM) has taken over 25 years of microfinance activities, programmes and banks that were administered by sister agencies within the AKDN. The underlying objectives of the Agency are to reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion. more